“It’s all right to tell a man to lift himself by his own bootstraps, but it is a cruel jest to say to a bootless man that he ought to lift himself by his own bootstraps.”-Martin Luther King Jr.
For many people around the world, the “American Dream” represents the ideal that anyone who is born in the United States of America, or anyone who immigrates there, can work his or her way up from nothing and become successful. Many US citizens and potential immigrants alike still cherish the ideal that smarts and drive are the recipe for success rather than how much money your parents have. If this is the paragon that we strive for, the current decline of intergenerational social mobility poses a real problem. When children from lower income families have no resources with which to climb the socio-economic ladder we know we have failed. The smaller problem of social mobility is caused in large part by an income and wealth inequality that has been growing since the 1970s (Kenworthy). Maybe it seems elementary or naïve to lament the fact that a select few people in this country own mansions and private jets while a significant amount of people struggle to get by, but it isn’t just out of middle-class envy that I bemoan the ultra-rich. Income inequality has deep roots and large implications for our nation as a whole—general economic weakening being just one of the consequences of such a wealth gap. If we cannot quickly reverse the trends of growing income and wealth inequality in the United States, we will continue to watch intergenerational social mobility falter. In order to overcome these inequalities we need to make government-mandated reforms in the areas of both finance and education— reforms that would make for a more level playing field. We need to fight for brighter futures for those who have been forced into thinking that their goals are unattainable, and for those who have been told again and again by this nation that it is worthless to dream.
For many high school students the dream is a college education. My generation relies on a college degree to find a good job more than ever before, and without one the job market can seem dire. The college application process in my town gave me valuable but disheartening insight on inequality in America. I witnessed extremely talented adolescents receive acceptance letters from renowned four-year institutions but register at community colleges with poor academic and program rankings simply because their family did not have enough income. It was more than disheartening to come to the realization that those students had little to no choice in the matter, even though their talent and hard work had taken them as far as it possibly could. It would be nice to believe that this data is localized, that it is the exception to a national trend, but unfortunately, it isn’t the case. Dream-abandoning students are a symptom of a nation-wide disease. How could anyone dare to say that the American Dream is still alive if this is happening to students all over the country? If those students had grown up with parents who had higher incomes, their futures may have altered completely. When looking at situations like this it is nearly impossible to deny the effect of income inequality on social mobility.
However, those who are unconvinced of the problem’s legitimacy just by taking a look around might do well to take a look at the facts. In an early 2012 presentation, Princeton labor economist Alan Krueger “took a scatter diagram from a 2011 paper by Corak [Krueger] and plugged in more recent data from the OECD (Organization for Economic Co-operation and Development). Corak’s diagram plotted income heritability against inequality and found that the two tended to increase together” (Noah 17). Essentially, as the wealth gap widens, it is likely that the rich will stay rich and the poor will stay poor. Thus, the ability to move up regardless of parental economic status declines. Even though there are many economists and academics alike who have come to the conclusion that income inequality and income heritability are related, there are some that still disregard the problem of income inequality. A common argument is that inequality is perfectly fair because those who are in the top one percent have worked hard for their money. Though sometimes true, it is impossible to ignore the immeasurable impact that resources and connections can play on the road to success. The bottom line remains: if intergenerational social mobility is declining, the nation is weakening socially and economically.
The actual level of inequality in the United States has become unprecedented. If you look at the OECD results for the 2012 Gini Coefficients you can see we are more unequal when it comes to income and wealth than the vast majority of developed Europe (Babones). Portugal is the next most unequal nation out of those analyzed, but its coefficient of 0.347 still pales in comparison to our 0.370, meaning that in the U.S., more wealth is concentrated in fewer hands (Babones). At this point, action needs to be taken. There are many disagreements on what has to be done to fix the system, but I would argue that major changes have to be made at the government level when it comes to finances and the educational system.
Fiscally, one solution would be higher tax rates for the top one percent. That money could go towards education or other government programs that benefit the disadvantaged. Though many are opposed to that solution, preaching that a policy of “trickle-down economics” is better for the economy, a recent report from the Congressional Research Service suggests that “the reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth…” (Hungerford). However that same study did show that taxing the rich at lower levels is correlated with an increasing income inequality. Simply put, low tax rates for the richest members of society do not promote economic growth, just a more pronounced disparity. In addition to some sort of change in tax policy, it would also be beneficial to have corporations implement a high to low pay gap restriction (so that CEOs could not be paid astronomically more than their workers). Journalist Sam Pizzigati writes about the British reaction to their own rising income inequality in a 2011 article and notes particularly how Islington, a London borough, instated a ten-times pay commitment in late 2011. If corporations in the United States could adopt a similar policy, it might lessen the colossal chasm between employee wages and the salaries of those who manage the company. In short, it would be a stepping stone towards equality.
Though fiscal intervention and higher taxation of the top 1% are the most commonly vocalized remedies for wealth inequality, there are some alternate solutions that seem to get ignored. The educational system also needs to be reformed if we want to see a society where every child has the same opportunities. Now, it may seem as if this has little to do with income inequality, and everything to do with intergenerational social mobility, but the two move together. If children from lower income families are able to get a good education and then a high paying job, they will have bucked the trend of income heritability, and thus nationally income inequality should lower. At a state level, there needs to be greater equality of public schools. Even within states, some schools thrive while others drag by with pathetic amounts of funding and archaic technologies. If students were afforded the same (or at least comparable) opportunities at an elementary, middle and high school level, there would be a much higher level of academic equality. This is true also of universities. According to Professor Lane Kenworthy of the University of Arizona: “The equalizing effects of college, too, cannot be overstated. Among Americans whose family incomes at birth are in the bottom fifth but who get four-year college degrees, 53% end up in the middle fifth or higher. That is pretty close to the 60 percent chance they would have with perfectly equal opportunity” (Kenworthy). Government legislation that would make the cost of going to a four-year college more accessible would be a legitimate and effective way to promote equality of income in the next generation.
If you look around, it is easy to see the effects of the astronomical income inequality in the United States, whether it be simply noting that some people inherit multi-million dollar mansions while other American citizens struggle to feed their families, or noticing the devastating trend of students being forced to give up their dreams of higher education. This is a problem that the lower and middle classes can relate to most, but the truth is when there is a huge wealth gap the entire nation weakens and suffers. When intergenerational social mobility is weak, talent allocation is often skewed. To have the brightest and most capable minds running corporations and taking part in government, everyone must have an equal opportunity. Talent does not come only from the ultra-privileged—beautiful minds come from everywhere, and it is a sin that some raw talents do not even have the chance to blossom. We must take a stand as American citizens and refuse to just watch as our society as a whole is crippled by the lack of opportunity given to those who were not born into wealth. If we wish for more equality, and thus more social mobility for the next generation, we should fight to instate updated tax reform, high to low pay gap restrictions and educational reform at the elementary and collegiate level.
Babones, Salvatore. “U.S. Income Distribution: Just How Unequal?” Program on Equality and the Common Good. 14 Feb. 2012. Inequality.org. Web. 11 Nov. 2012.
Hungerford, Thomas L. Taxes and the Economy: An Economic Analysis of the Top Tax Rates since 1945. Rep. Congressional Research Service, 14 Sept. 2012. Web. 11 Nov. 2012.
Kenworthy, Lane. “It’s Hard To Make It In America.” Foreign Affairs 91.6 (2012): Business Source Complete. Web. 8 Mar. 2013.
Noah, Timothy. “The Mobility Myth.” New Republic 243.3 (2012): 14-17. Academic Search Complete. Web. 2 Nov. 2012.
Pizzigati, Sam. “Why Greater Equality Strengthens Society.” Nation 293.26 (2011): 11-15. Academic Search Complete. Web. 2 Nov. 2012.
Melguizo, Tatiana, Gregory S. Kienzl, and Mariana Alfonso. “Comparing The Educational Attainment Of Community College Transfer Students And Four-Year College Rising Juniors Using Propensity Score Matching Methods.” Journal Of Higher Education 82.3 (2011): 265-291. Education Research Complete. Web. 15 Jan. 2013.
Solman, Paul. “Income Inequality vs. Wealth Inequality.” Pbs.org. PBS, 9 Nov. 2012. Web. 11 Nov. 2012.
“Wealth Inequality.” Inequality.org. Program on Equality and the Common Good, Web. 11 Nov. 2012.
 According to a 2011 paper in the Journal of Higher Education, students who transferred into a 4 year college after attending community college had a 60% chance of attaining a degree, while students who started out at a four year institution had a 73% chance (Melguizo, Tatiana, and Kienzl 276). This research suggests that a community college background could in fact be a handicap for a student planning to finish his or her degree at a more selective college.
 The Gini Coefficient is rather complex, but it is essentially just a measure of income inequality, with a higher coefficient meaning a more unequal wealth distribution.
 A system where wealthier people invest in the economy with their disposable income and the entire population benefits—proponents of this theory generally propose tax breaks for the wealthy.